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Post date: January 29 2003

Long Island "educational Survey" Firm Agrees To Halt Deceptive Practices

Attorney General Spitzer today announced the entry of a consent decree preventing a Long Island company from using a phony "educational survey" to collect and sell personal data on millions of students nationwide.

Student Marketing Group, Inc. (SMG) of Lynbrook and its non-profit arm -- the Educational Research Center of America, Inc. (ERCA) -- agreed to the entry of the order and paid $75,000 to settle the case with the state.

"This court order halts a scheme that duped young people into providing detailed personal information without the knowledge or consent of their parents," Spitzer said. "This information was then sold to other companies and used for marketing pitches."

"Our children's privacy should not be violated in order to make a buck," the Attorney General said.

Spitzer's office initiated the case against SMG last August, accusing the company of tricking teachers into distributing the annual surveys to their students. The surveys were said to help college-bound students gain access to financial aid. In reality, the company's survey was a mechanism for collecting personal data that was then sold to telemarketers and other direct marketing firms.

The information gathered included: names, addresses, e-mail addresses, and telephone numbers, as well as grade point average, date of birth, academic or occupational interests, athletic or extracurricular interests, racial or ethnic background and religious affiliation. This information was resold to companies selling magazines, music videos, credit cards, clothing, cosmetics and student loans.

Since 1999, SMG, through its non-profit subsidiary, ERCA, has mailed annual surveys to teachers of approximately 14 million students across the nation.

Under the terms of the court order, the company and its subsidiaries are barred from disclosing for non-educational marketing purposes any personal information it gathers from students in New York State unless it provides a clear notice to parents, students and educators prior to distributing the surveys.

In addition, the company and its subsidiary must destroy records and data banks of all personal information previously collected through surveys distributed in New York State for any student who was under the age of 13. For students who were over the age of 13, the company is banned from using or selling that information for commercial marketing purposes.

The Federal Trade Commission has entered into a similar settlement with the company to resolve the federal agency's investigation.

This case was handled by Assistant Attorneys General Stephen Mindell and Herbert Israel of the Consumer Frauds and Protection Bureau.